O2 3G iPhone early termination fee.
- Thread starter sk8mash
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I think early termination fees maybe an american thing. As far as I am aware, in the UK we have to pay the remainder of our contract:
£45 p/m for 18 months = £810
So you would be better off just buying a pay as you go model for around £500 (thats a guess, not sure how much the pay as you go phones will cost yet).
Im sure someone else will confirm/correct the above, but if you really want to be sure you will likley need to call O2 and a definate answer from them.
£45 p/m for 18 months = £810
So you would be better off just buying a pay as you go model for around £500 (thats a guess, not sure how much the pay as you go phones will cost yet).
Im sure someone else will confirm/correct the above, but if you really want to be sure you will likley need to call O2 and a definate answer from them.
edesignuk
Moderator emeritus
^ Yup, never heard of termination fees here. You can buy your way out by paying up for the remainder of your contract, but that's hardly a good way to go. They may let you out if you're leaving the country, but that's about it.
While I of course know nothing more than anyone else, I wouldn't expect the PAYG 3G iPhone to be anywhere close to £500 (as mentioned above).
The BOM of the old iPhone was $170, the BOM of the new iPhone is $100. Unsubsidised the last iPhone was £269. A PAYG 3G iPhone is essentially unsubsidised also. Apple will be making money off apps/music/video etc, and their materials cost is now substantially lower, plus they will be pumping these out in a much much larger volume so manufacturing costs should be a good deal less. All in all (short of greed) there's no reason why the PAYG 3G iPhone should cost much more than the old contract tied one.
/my theory.
While I of course know nothing more than anyone else, I wouldn't expect the PAYG 3G iPhone to be anywhere close to £500 (as mentioned above).
The BOM of the old iPhone was $170, the BOM of the new iPhone is $100. Unsubsidised the last iPhone was £269. A PAYG 3G iPhone is essentially unsubsidised also. Apple will be making money off apps/music/video etc, and their materials cost is now substantially lower, plus they will be pumping these out in a much much larger volume so manufacturing costs should be a good deal less. All in all (short of greed) there's no reason why the PAYG 3G iPhone should cost much more than the old contract tied one.
/my theory.
i think your theory makes sense. and i'm told there's even a little bit of a subsidy on pay and go phones. i wish they would hurry up and publish the prices!
+1
Same with all operators, not just O2. It makes sense really as you signed a contract.
The operator isn't going to say "well we were going to get at least £810 out of you, but go on, let's call it £200, and you can keep the phone because we're a people company".
Why do they have early termination fees in the US? Is it a legal requirement?
edesignuk
Moderator emeritus
I think people generally pay more for their handsets than we do*.
*this statement is subject to being completely wrong.
I thought it was illegal to subsidise PAYG phones in the UK
You used to be able to get them for free from mobile operators but then either an anti-competition law was introduced, or a regulatory group stepped in and subsidies were removed.
I think this was about 5 or 6 years ago now (perhaps a little longer).
edesignuk
Moderator emeritus
I have no idea. If they were able to subsidise though it wouldn't be by much anyway since they have no guaranteed revenue.
Never the less, my Theory still stands
don't know much about it other than something that was posting the other day about "box breakers" who take advantage of the discounts on some pay and go phones to export them to other countries where they can be sold at a higher price. apparently someone from 02 was saying that they were hoping to price the pay and go iphone to deter box breakers but to still remain competitive.
http://www.mobiletoday.co.uk/O2_takes_box_breaking_precautions_on_3G_iPhone.html
Agreed.
They used to be subsidised to the point of being free because they were locked to a network.
Not a bid deal nowadays, but back then unlocking of phones either wasn't widespread at all, or there wan't any point: If people wanted to move network on PAYG, they just went into the Orange or One2One shop (remember them!) and got another PAYG phone for free, or a very minimal fee (I think £10 could get you pretty much any PAYG phone).
My last contract phone with O2 before the iPhone, a Sony Ericsson W880i, was unlocked.
Does anybody know of it? I tried to google it but came up with nothing. If I was to buy the £45 contract, and get the free iPhone, then pay the termination fee it could be cheaper! Unless there is a hole in my plan
I spoke to o2 & they advised that you only need to be on the £45 pm contract for 9 months & then you can downgrade.
Didn't follow the link, but the 'box breaking' item I heard on the news was to do with O2 staff buying loads of iPhones with their staff discount and then selling them for a profit on Ebay. I think O2 sacked 20-odd people for it.
C
senorFunkyPants
macrumors 6502
But its O2 that set the price for PAYG (regardless of manufacturing costs), it buys the iPhone from Apple for whatever price and sellls it with the maximum profit they believe the market can stand within the context of the price of the contract iphone.
Why would O2 sell an exclusive PAYG iPhone cheaply at £269 in direct competition to its contract version (worth a minimum term cost of £639) with the expectation that the PAYG iphones may well be unlocked and used on a competitors network?
edesignuk
Moderator emeritus
I realise that, but at the same time there's no point in them having exclusivity to a device priced so highly that no one buys it.
So long as they sell it at a price that covers the cost to them for the hardware, they are expanding on their user base and making any extra cash that customer spends on their PAYG.
Most grown ups will still prefer to be on a contract as they are generally much better value, plus the handset still costs no where near that of the PAYG. o2 can't go far wrong here.
As far as I was aware, the first iPhone was subsidised. Anyone rememeber when they were forced to release the phone in germany unlocked for like 999 or something obsurd like that? I have a feeling on pay as you go, it is very likely to be ~£500. You only need to look at current phones with similar contracts, such as the N95 which is ~£400 contract-less.